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QUESTION 3 Not complete6.67 points out of 10.00 Flag question Question text Depreciation Tax Shields Lincoln Company has purchased equipment for...

QUESTION 3Not complete6.67 points out of 10.00 Flag question

Question text

Depreciation Tax Shields

Lincoln Company has purchased equipment for $600,000. After it is fully depreciated, the equipment will have no salvage value. Lincoln may select either of the following depreciation schedules for tax purposes:

Option 1Option 2YearDepreciationDepreciation1$120,000$60,0002192,000120,0003115,200120,000469,120120,000569,120120,000634,56060,000


Assuming a 40% tax rate and a 12% desired annual return, compute the total present value of the tax savings provided by these alternative depreciation tax shields. 

Round answers to the nearest whole number. Use rounded answers to calculate total. 

Option 1 depreciation:

Year (N)Tax Savings (FV)

Present Value1$Answer


$Answer


2Answer


Answer


3Answer


Answer


4Answer


Answer


5Answer


Answer


6Answer


Answer


$Answer


Option 2 depreciation: 

Year (N)Tax Savings (FV)Present Value1$Answer


$Answer


2Answer


Answer


3Answer


Answer

Incorrect

0.00 points out of 1.00

4Answer


Answer


5Answer


Answer


6Answer


Answer


$Answer

Top Answer

Answer is provided in desirable format as attachment. Note ; - Ignore the ........ Column - 3 ... i.e... View the full answer

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